P18-1 Definitions The FASB has defined several terms in regard to accounting for income taxes. Below are various code letters (for terms) followed by definitions. Code Letter Term A Future deductible amount B Income tax payable (or refund) C Effective tax rate D Valuation allowance E Deferred tax asset F Operating loss carryforward G Taxable income H Deferred tax consequences I Future taxable amount J Deferred tax liability K Temporary difference L Income tax expense (or benefit) M Deferred tax expense (or benefit) _________1. The deferred tax consequences of future deductible amounts and operating loss carryforwards _________2. A difference between the tax basis of an asset or liability and its reported amount in the financial statements that will result in taxable or deductible amounts in future years when the reported amount of the asset or liability is recovered or settled, respectively _________3. Temporary difference that results in taxable amounts in future years when the related asset or liability is recovered or settled, respectively _________4. The future effects on income taxes, as measured by the applicable enacted tax rate and provisions of the enacted tax law, resulting from temporary differences and operating loss carryforwards at the end of the current year _________5. The change during the year in a corporation’s deferred tax liabilities and assets _________6. The deferred tax consequences of future taxable amounts _________7. The portion of a deferred tax asset for which it is more likely than not that a tax benefit will not be realized _________8. Temporary difference that results in deductible amounts in future years when the related asset or liability is recovered or settled, respectively _________9. The sum of income tax payable and deferred tax expense (or benefit) ________ 10. The amount of income taxes paid or payable (or refundable) for the current year ________ 11. An excess of tax deductible expenses over taxable revenues in a year that may be carried forward to reduce taxable income in a future year ________ 12. The excess of taxable revenues over tax deductible expenses and exemptions for the year ________ 13. Income tax expense divided by income before income taxes Required: Indicate which term belongs with each definition by inserting the corresponding code letter on the line preceding the definition.
P18-1 Definitions The FASB has defined several terms in regard to accounting for income taxes. Below are various code letters (for terms) followed by definitions.
Code Letter Term
A Future deductible amount
B Income tax payable (or refund)
C Effective tax rate
D Valuation allowance
E
F Operating loss carryforward
G Taxable income
H Deferred tax consequences
I Future taxable amount
J Deferred tax liability
K Temporary difference
L Income tax expense (or benefit)
M Deferred tax expense (or benefit)
_________1. The deferred tax consequences of future deductible amounts and operating loss carryforwards
_________2. A difference between the tax basis of an asset or liability and its reported amount in the financial statements that will result in taxable or deductible amounts in future years when the reported amount of the asset or liability is recovered or settled, respectively
_________3. Temporary difference that results in taxable amounts in future years when the related asset or liability is recovered or settled, respectively
_________4. The future effects on income taxes, as measured by the applicable enacted tax rate and provisions of the enacted tax law, resulting from temporary differences and operating loss carryforwards at the end of the current year
_________5. The change during the year in a corporation’s
_________6. The deferred tax consequences of future taxable amounts
_________7. The portion of a deferred tax asset for which it is more likely than not that a tax benefit will not be realized
_________8. Temporary difference that results in deductible amounts in future years when the related asset or liability is recovered or settled, respectively
_________9. The sum of income tax payable and deferred tax expense (or benefit)
________ 10. The amount of income taxes paid or payable (or refundable) for the current year
________ 11. An excess of tax deductible expenses over taxable revenues in a year that may be carried forward to reduce taxable income in a future year ________ 12. The excess of taxable revenues over tax deductible expenses and exemptions for the year
________ 13. Income tax expense divided by income before income taxes
Required: Indicate which term belongs with each definition by inserting the corresponding code letter on the line preceding the definition.
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